Launchy Regulatory Roundup #51 - CFTC Clarifies US Access to Foreign Crypto Exchanges

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Welcome to our 51st edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

In Today's Edition:

• Headline: CFTC Clarifies US Access to Foreign Crypto Exchanges 👀 

• Global Legal Roundup

• Case Study: DeFi ID Checks vs Privacy 🔎 

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HEADLINE

CFTC Clarifies US Access to Foreign Crypto Exchanges

State of play: The CFTC clarified how non-US exchanges can legally offer access to American traders, reaffirming that foreign boards of trade (FBOTs) registered with the CFTC do not need to also register as designated contract markets (DCMs).

• CFTC Acting Chair said the move provides regulatory clarity and helps reverse the past trend of driving trading activity offshore.

• The guidance signals a friendlier stance toward crypto, contrasting with the Biden era when foreign platforms ere charged for failing to register as DCMs.

• This clarification aims to restore US trader access to global markets while giving foreign exchanges a clear compliance path.

What’s Next: The CFTC’s advisory gives foreign exchanges a clearer compliance path, but the real test will be whether major platforms re-enter the US market under this framework.

Why it Matters: This marks a shift from regulation by enforcement to regulatory clarity, potentially reversing years of capital and innovation leaving the US.

Our Take: If exchanges act on this guidance, it could usher in a more balanced era of oversight and participation, reducing the reliance on offshore hubs.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Fed Governor Lisa Cook sues Trump as he tries to fire.

• 🇺🇲 Crypto industry pushes congress to protect developers.

• 🇺🇲 CFTC left with single commissioner, crypto oversight in limbo.

• 🇺🇲 CFTC taps Nasdaq surveillance system as expands crypto oversight.

• 🇺🇲 MSTR investors drop class action alleging BTC treasury company misled them.

APAC:

• 🇵🇭 Philippine senator eyes proposal to place budget on blockchain.

• 🇨🇳 Former China CB chief challenges need for stablecoin adoption.

• 🌍 Chainalysis, Tether, Binance, & OKX help law enforcement freeze ~$50M.

CASE STUDY

DeFi ID Checks vs Privacy

State of play: The US Treasury is weighing whether to require identity checks inside DeFi smart contracts as part of its GENIUS Act mandate.

• The idea is to embed KYC and AML at the protocol level, letting smart contracts automatically verify government IDs or biometrics before transactions.

Proponents say it would deter criminals and streamline compliance, but critics argue it threatens the core of DeFi.

• They also argue that ID checks is eroding privacy, enabling surveillance, and excluding the unbanked.

• They warn that linking IDs to wallets could make all transactions traceable, turning permissionless finance into a gated system.

• Privacy-focused alternatives like zero-knowledge proofs and decentralized identity frameworks are being put forward as less invasive solutions.

Our Take: Treasury’s plan risks turning open DeFi into a gated system. The better path is privacy tech like ZKPs and decentralized IDs, which can balance compliance without destroying permissionless finance.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Nic Carter’s read on Strategic Bitcoin Reserve.

• Summer Mersinger’s summary on what’s coming this fall.

• DEF & Crypto Industry’s letter on Developer Protections in Market Structure.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.